April 12 (Bloomberg) -- BlackBerry, the Canadian smartphone
maker, said it will ask securities regulators to investigate a
report that its new phones have high return rates, arguing that
the “false” information may have been released in a deliberate
attempt to manipulate its stock price.

Detwiler Fenton & Co., a financial-services firm in Boston,
said yesterday that U.S. retailers were seeing a significant
increase in customers returning their Z10s because they found
the interface unintuitive. “In several cases, returns are now
exceeding sales, a phenomenon we have never seen before,”
Detwiler Fenton said. The report contributed to a 7.8 percent
plunge in BlackBerry shares yesterday, marking the stock’s worst
one-day drop in almost two months.

BlackBerry, based in Waterloo, Ontario, responded that
sales are meeting expectations and return rates are in line with
the rest of the industry. It asked both the U.S. Securities and
Exchange Commission and the Ontario Securities Commission to
review the Detwiler report, saying it was either “a gross
misreading of the data or a willful manipulation.”

“We call upon the appropriate authorities in Canada and
the United States to conduct an immediate investigation,” Chief
Legal Officer Steve Zipperstein said in a statement. “Everyone
is entitled to their opinion about the merits of the many
competing products in the smartphone industry, but when false
statements of material fact are deliberately purveyed for the
purpose of influencing the markets a red line has been
crossed.”

‘In Line’

Verizon Wireless, the largest U.S. carrier, said the Z10
isn’t suffering from quality problems, though it declined to
discuss return rates.

“After the first 14 days, quality performance of the Z10
has been in line with similar devices we’ve launched,” Verizon,
which began offering the Z10 last month, said in an e-mail. AT&T
Inc., the second-largest carrier, declined to comment.

BlackBerry, formerly known as Research In Motion Ltd., is
counting on the new Z10 phone -- and its pending companion
device, the Q10 -- to fuel a turnaround after years of market-share losses. While its stock has more than doubled since
September on optimism about the company’s prospects, more short
sellers are betting that the comeback will fail. Short positions
by investors looking to profit from a drop in the shares are
near a record high.

Anne Buckley, a spokeswoman for Detwiler Fenton, declined
to comment and said none of its analysts are available to
discuss the matter. Detwiler Fenton’s six-person equity research
team focuses on tracking technology and consumer stocks,
according to its website.

BlackBerry rose 0.7 percent to $13.64 at the close in New
York today. The shares have gained 15 percent this year.